We recently published a list of 5 Stocks Negatively Impacted By The LA Wildfires. In this article, we are going to take a look at where The Travelers Companies, Inc. (NYSE:TRV) stands against other stocks negatively impacted by the LA wildfires.
According to a recent estimate by Goldman Sachs, losses to insurance companies resulting from the Los Angeles wildfires could be as high as $30 billion. Consequently, many insurance stocks, particularly property and casualty insurance companies, have been trading down or sideways since the fires started. Utility companies in the area are also struggling to figure out the extent of the damages as well as their future prospects in the region.
Even today, a large portion of the fire remains uncontrolled, left at the mercy of the strong LA winds to determine the direction in which it will spread. Insurance companies will not only have to settle claims quickly but are also uncertain how much more the fires will spread. We looked at the companies that are negatively impacted by these events and whose stock is feeling the heat from the fires.
To come up with the 5 stocks that are negatively impacted by the LA wildfires, we only considered companies with a market cap of at least $10 billion.
A woman signing a policy document while a representative from the insurance company looks on.
The Travelers Companies, Inc. (NYSE:TRV)
The Travelers Companies, Inc. (NYSE:TRV) not only deals with personal and commercial properties but also offers casualty insurance services in the US and internationally. In the insurance segment, it operates in personal insurance, business insurance, and bond and specialty insurance. The stock’s price has consistently rewarded investors along with a reliable dividend history. Even though the company’s evaluation is attractive, the ongoing crisis of the Los Angeles wildfire is a cause of concern for investors.
If Travelers (NYSE:TRV) incurs a loss worth $30 billion, it would lose about 3.8% of its total value. It is just an estimate but losses can cross this estimate if the fire keeps spreading. Shares in Los Angeles-based Travelers have recovered most of their losses in the last 5 days, though the stock is still down over 4% in the last month. Property and casualty stocks keep declining as they are in the spotlight due to LA’s wildfire.
According to J.P. Morgan, insurance losses from the ongoing wildfires are estimated to be at least $20 billion. It suggests that The Travelers Companies, Inc. (NYSE:TRV) is among the companies that are most exposed to the losses caused by ongoing wildfires. The company’s financial health and strong performance are good indicators but the situation right now is not in its favor. It might be a risky option at the moment but it is still a valuable option for the long term.
Overall, TRV ranks 5th on our list of stocks negatively impacted by the LA wildfires. While we acknowledge the potential of TRV as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TRV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
